Betrayed by the Business Press

September 24, 2002

By Ciro Scotti "I worked for newspapers. I worked for newspapers at a time when I was not competent to do so. I reported inaccurately. I failed to get all the facts. I pretended I knew things I did not know. I pretended to understand things beyond my understanding. I misinterpreted things that took place before me. I failed to discover the truth. I had no respect for the truth. I failed to heed the adage, you shall know the truth and the truth shall make you free."

--Truncated from City Life by Donald Barthelme

In the Presidential campaign of 2000, Pat Buchanan, whose antibusiness populism was ahead of its time, always got a laugh when he referred to George W. Bush as "a bellhop for Corporate America."

That image never seemed more apt than when the corporate crime wave of the past two years left the bellhop stammering to reassure cleaned-out investors, even as he struggled with his own baggage from Harken Energy.

Bush was hardly the only bellhop for business, however. Buchanan used to rant that there was no difference between Republicans and Democrats, how they were a matched set of corporate tools. Indeed, both major parties spent most of a decadent decade tripping over each other to please the insatiable suits and dot-com "visionaries" who were removing our financial trousers.

SPREADING THE BLAME. Even Arizona Senator John McCain -- one Republican granted virtual media sainthood by journalists -- gathered hundreds of thousands in campaign donations from the telecom industry. Yes, the same industry decimated by shady loans, shaky deals, overbuilding, and greed.

Now the manicured knights of Capitol Hill are busy spreading the blame for the fleecing of the American investor. No-account accountants, low-life Wall Street analysts, and piggish corporate executives have all been paraded in front of righteous congressional committees to sweat for TV cameras. And with an election in the offing, business reforms have streaked through Congress faster than a Senate page trying to dodge Strom Thurmond.

Several bellhops, however, have managed to slip through the summer-long bout of recrimination and self-examination. Take consultants, who are surviving the crisis largely unscathed. Or lawyers, who are not only riding out the storm but profiting from it. But perhaps more than any other group that ought to be hanging its collective head, it's the business media that seems to be getting off scot-free.

SMART-ALECK KISS-UPS. Americans who were led to believe in the promise of instant stock-market wealth were betrayed by CEOs who cooked the books, techno-wizards selling snake oil, and Wall Street lizards who wouldn't give their mother an even break. But they were also betrayed by the bellhop business press.

As the money from the boom rolled in, normally skeptical editors -- and their broadcast brethren -- fell all over smart-aleck young writers whose idea of reporting was to kiss up to smart-aleck young dot-comers. No praise was too high for the builders of the New Economy, and whippersnapper journalists who could have learned something covering the police beat in a Buffalo suburb instead became instant oracles of a future that never arrived.

The editors who oversaw this flock of parrots brooked no dissent, dismissing the most basic financial questions as the uninformed ramblings of luddites. Rigorous analysis was trampled in the rush to crown the next big thingamajig.

UNWATCHED BACKS. It's to be expected that bean-counters will count all the beans, that top executives will act in the interest of shareholders, and that stock analysts will consider a company with a critical eye. But their job doesn't involve a public trust. Watching the public's back is what journalists are supposed to do -- and that's why they're afforded special status in a society that recognizes the importance of knowing the truth.

Before Congress finishes its grilling, it ought to drag a few business editors and TV stock jocks before some committee or another to explain just how in hell they and their flunkies got this story so wrong. Scotti, senior editor for government and sports business, offers his views every week in A Not-So-Neutral Corner, only for BusinessWeek Online